Indianapolis International Airport Tax Impact Study
table of contents
Executive Summary....................................................................................1
Indianapolis Airport Authority – 2011 Principal Tax Type Revenues
by Source Entity Category & Benefiting Jurisdiction................................2
Introduction................................................................................................3
Objectives of the Study.............................................................................4
Approach and Assumptions Used.............................................................4
Results of Study..........................................................................................7
Observations and Conclusions................................................................19
Appendix..................................................................................................20
Ameriplex and Park Fletcher Property Maps
Executive Summary
There have been a number of studies performed in recent years that attempt to quantify the
nature and magnitude of the various financial benefits airports provide to the overall economy.
Industry and regional studies provide high-level views of the economic activity and impacts
airports generate, often in terms of numbers of employees, total annual wages and total direct
and indirect spending. For instance, a recent 2010 study (released in 2012) finds that 10.5 million
jobs, $365 billion in annual payroll and $1.2 trillion in annual economic output can be attributed to
commercial airports. However, these studies do not typically translate the benefits to their effect
on local communities. The economic benefit of an individual airport is not easily captured in a
single measure, because of the variety of its activities and its broad and dispersed impact.
This particular study examines the specific direct and indirect tax impacts on the State of Indiana
and six local jurisdictions within Marion County (the Benefiting Jurisdictions) produced by
Indianapolis International Airport (IND) and certain surrounding off-airport developments, the
existence of which are greatly benefited by their proximity to IND. There is an incremental direct
and indirect tax impact to other tax jurisdictions not analyzed in this study.
More specifically, this study identifies a total of 186 businesses and organizations that comprise
IND’s footprint and analyzes their combined economic impact on neighboring local communities
and the State of Indiana in the form of the 10 most significant state and local tax revenues they
generate. The resulting analysis reveals that these businesses and organizations annually generate
more than $44 million in tax revenues for the Benefiting Jurisdictions. As an example, car rental
agencies, logistics companies (including FedEx) and airlines—businesses most closely linked to
the existence of IND—contribute more than 69% of the total $44 million in tax revenues. [See the
diagram on the following page for a summary of these findings.]
This study also finds that surrounding off-airport developments produce more than $12.5 million
in real property taxes for some of the same aforementioned tax jurisdictions. When combined
with the latter, this amounts to more than $56.5 million in annual tax benefits. Note that this study
excludes the impact of the various other taxes generated by off-airport businesses.
Overall, the observations in this study generally mirror the findings of industry and regional studies
by demonstrating considerable economic impacts on a local scale. In other words, IND is the
impetus behind certain positive economic impacts on surrounding populations; those stemming
from the amount of tax revenues generated from airport and airport-related activities. In this
context, it is important to mention that the operations of IND are not supported by any state and
local taxes, but instead by rentals, fees and other charges from its tenants, concessionaires and
customers. In fact, the economic activity occurring at IND and certain surrounding businesses
actually generate substantial tax dollars that are then returned to local communities and the State
of Indiana to be used to support the health, education and welfare of their respective populations.
2012
1
INDIANAPOLIS AIRPORT AUTHORITY – 2011 PRINCIPAL TAX TYPE REVENUES BY SOURCE ENTITY CATEGORY & BENEFITING JURISDICTION
Aggregate Principal Tax Type Revenues Received from IND Entities
$5,174,782
[Total = $44,943,938]
$5,313,350
$13,186,633
$4,249,885
$12,585,965
SOURCE IND Entities
$4,433,323
Income Tax
COIT
LOIT
USE –
Benefiting Jurisdictions
County
State
Governments & IAA
Airlines
Income Tax
COIT
LOIT
Personal
Property Tax
Services & Contractors
Income Tax
COIT
LOIT
Food/Beverage, Restaurant & Hotel
Car Rental
Sales Tax
Auto Rental Excise Tax
Marion County Excise
Surtax
Income Tax
COIT
LOIT
Personal
Property Tax
Personal
Property Tax
Sales/Use Tax
Income Tax
COIT
LOIT
Food & Beverage
Tax
Innkeeper’s Tax
Personal
Property Tax
Logistics
Income Tax
COIT
LOIT
Personal
Property Tax
$
State
Marion County
MSD Decatur
Decatur Twp
Aggregate Principal Tax Type Revenues Received by Benefiting Jurisdiction
$21,594,616
$6,434,461
$7,231,993
$4,660,400
MSD Wayne
Wayne Twp
Capital Improvement Board
[Total = $44,943,938]
$241,223
$845,318
$3,935,927
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Indianapolis International Airport Tax Impact Study
Introduction
There is no question: airports are drivers of economic development. In fact, airports can create
a sizeable economic impact in thriving, growing communities in a time frame and breadth that is
difficult to match using any other means. Generally, an airport’s direct economic impact comes
in the form of jobs, wages, spending and tax revenues from businesses located at the airport,
visitor spending at the airport and the airport’s own operations. Additionally, airports provide
commerce and economic opportunities for businesses that are within close proximity to the
airport. Finally, there is the intrinsic value received by individuals who utilize an airport’s facilities
and services. Several studies issued in recent years provide confirmation of the economic impact
of airports and also attempt to quantify such impact.
In January 2012, a study entitled The Economic Impact of Commercial Airports in 2010, prepared
for Airports Council International – North America was released. It summarized the contribution
that 490 commercial airports in the United States make to the national economy. The analysis
tabulated the economic contributions in terms of employment, annual payroll and annual output
and concluded that, in the aggregate, commercial U.S. airports:
• Support 10.5 million jobs
• Create an annual payroll of $365 billion
• Produce an annual economic output of $1.2 trillion
The Aviation Association of Indiana (AAI) produces periodic studies of the economic impact
of airports in Indiana. AAI has issued 12 studies since its first in 1984, with the most recent
completed in 2007. This study addressed the value of economic benefits generated at airports
in Indiana. Its conclusions are based on survey responses received from 47 of 73 publicly
owned airports in Indiana and U.S. Department of Transportation public airport operating data.
Summary findings of the study follow:
• The total annual impact of direct and indirect airport economic activity on Indiana’s
economy was estimated to be more than $5.2 billion.
• Airports are responsible for bringing jobs to local communities. At the time of this study,
Indiana airports accounted for more than 17,163 jobs and more than $640 million in direct
wages.
• In addition to the impact of direct airport expenditures (from the airport and airport tenants
and lessees), the study identified indirect expenditures (off-airport expenditures resulting
from the presence of an airport), as well as induced expenditures (dollar turnover due to
airport spending—aka, the spending “multiplier effect”) impacting local communities as a
result of airport spending.
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Indianapolis International Airport Tax Impact Study
Objectives of the Study
While these and other studies provide a high-level view of the magnitude and trends of
economic impacts produced by airports, few speak to the impact of individual airports, such as
Indianapolis International Airport (IND), on their surrounding local communities.
This study is therefore meant to provide some context as to the economic impact of IND on the
local communities within which IND is located, as well as other affected regions. The economic
benefit of an individual airport is not easily captured in a single measure because of its broad
and dispersed impact. Therefore, rather than attempting to quantify multiple measures, this
study is designed to primarily examine the direct economic impact of IND’s on-airport activity
in terms of tax revenues generated. This study did not examine the numbers of jobs, operating
expenditures, capital expenditures and other impacts, all of which would result in incremental
tax benefits to the Benefiting Jurisdictions. Keep in mind that direct impacts are derived from
economic activities that would largely not occur in the absence of the airport.
This study will also examine the indirect economic impact provided by IND of real property tax
revenues generated from surrounding business developments in Marion County, Indiana (Marion
County), based on the assumption that such developments likely would not be present (at least
in the same form or to the same extent) but for their location and/or economic dependency on
IND. In other words, it is presumed the proximity of IND to certain local communities creates
opportunities for economic development and impact. Note that taxes other than real property
have been excluded from this portion of the study, since there are few independent sources of
information from which data could be obtained to measure the tax impact generated by such
surrounding developments.
Approach and Assumptions Used
Information in this report was derived primarily from the following procedures and resources:
Initial Information Gathering: This phase of the study was designed to identify: (1) all airport
tenants, concessionaires and lessees residing on airport grounds (collectively, IND Entities); (2)
the most common and significant types of taxes the IND Entities collect and pay (collectively,
Principal Tax Types); and (3) the tax authorities that substantially benefit from such taxes
(collectively, Benefiting Jurisdictions). A total of 186 IND entities were identified, 10 principal
tax types were selected, and seven Benefiting Jurisdictions were isolated for purposes of this
study. In addition, the most prominent airport-related developments within Marion County that
are contiguous to IND were identified for inclusion in this study. These include certain logistics
companies (including a significant FedEx cargo operation) and other businesses that reside within
the business parks of Park Fletcher and Ameriplex (collectively, Off-Airport Developments). Maps
delineating the property areas comprising these Off-Airport Developments are provided in the
Appendix to this study.
Data Collection: In all cases, 2011 data were used to prepare this study. Publicly available
sources of data were used whenever possible. Information was collected from a number of
sources, including records of the Marion County Treasurer, Indiana Legislative Services Agency,
Department of Local Government Finance, Indianapolis Airport Authority, Capital Improvement
Board of Managers (of Marion County) and the Marion County Zoning Commission.
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Indianapolis International Airport Tax Impact Study
Property Taxes
Property taxes levied for all governmental entities located within Marion County are collected
by the Marion County Treasurer. On or before August 1 each year, the Marion County Auditor
must submit to each underlying taxing unit a statement of (i) the estimated assessed value of
the taxing unit as of March 1 of that year and (ii) an estimate of the taxes to be distributed to the
taxing unit during the last six months of the current budget year. The estimated value is based
on property tax lists delivered to the Marion County Auditor by the Marion County Assessor on
or before July 1.
Typically, property tax bills are mailed in April and October of each year and are due and payable
by the property owners in May (spring) and November (fall), respectively. Taxes are distributed
by the Marion County Auditor to the appropriate governmental entities by June 30 and
December 31 of each year.
Changes in assessed values of real property occur periodically as a result of general
reassessments required by the State legislature, as well as when changes occur in the property
value due to new construction, demolition or improvements. The next reassessment is
scheduled to be effective as of the March 1, 2012 assessment date and affects taxes payable
beginning in 2013. Reassessments are scheduled to occur every five years thereafter.
The Marion County Zoning Commission website was used to determine the real property parcels
that fall within the scope of this study. Concessionaire and lessee listings provided by the
Indianapolis Airport Authority were used to obtain the listing of IND Entities. Real and personal
property taxes levies were obtained through the Marion County and Indianapolis invoice Internet
portal. This portal provides information regarding spring and fall tax installment billings to
property owners. From these billings, the following information was collected: official name and
address of taxpayer, property tax address, taxing district, gross assessed value of property, tax
rate, gross tax liability, property tax cap savings, abatement/deduction applicable to property,
actual property tax liability due and the gross portion of tax for each taxing authority.
Income Tax Withholding
Actual tax withholding amounts were obtained for the Indianapolis Airport Authority. For the
airport-related businesses that operate at IND, there is no direct reporting of wage or income
tax withholding amounts except to taxing jurisdictions. In consultation with the Indianapolis
Airport Authority, two approaches were established as reasonable methods for determining
the wage base of airport-related businesses used in estimating income tax withholding. If sales
revenue amounts were available for an IND Entity, wages were estimated to be 25% of annual
sales revenues generated. If sales revenue amounts were not available, the wage base was
determined by multiplying the average wage of the IND Entity by the number of employees, as
agreed by each reporting IND Entity and the Indianapolis Airport Authority. The wage base was
reduced by 20%, in order to recognize that one of every five employees may not be a resident of
Marion County.
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Indianapolis International Airport Tax Impact Study
Excise Taxes
The Indiana Sales/Use Tax, Marion County Food and Beverage Tax, Marion County Innkeeper’s
Tax, Indiana Auto Rental Excise Tax and Marion County Supplemental Auto Rental Excise Tax
were calculated based upon sales revenues provided by the IND Entities to the Indianapolis
Airport Authority. In addition, for IND Entities reporting a mix of services and sales of tangible
personal property, industry averages of product sales to service ratios were used to calculate the
amount of product sales and, in turn, the sales tax due on the sale of tangible personal property.
The Indiana Gasoline Excise Tax and County Motor Vehicle Excise Surtax are based on
information provided to the Indianapolis Airport Authority by on-airport car rental agencies;
more specifically, the number of car rental transactions and number of vehicles in the car rental
fleet, respectively.
Analysis: Data information were not available for all IND Entities or all Principal Tax Types.
Available information from public resources only captured data relating to 130 of 186 IND
Entities. Although information may have been available for a certain tax type, information
may not have existed for the same entity for another tax type. Also, certain taxes were not
applicable to all entities. For instance, 101 of the 186 IND Entities reported personal property
tax filings. However, included among those not reporting personal property were nine exempt
governmental entities (including the Indianapolis Airport Authority) that are exempt from
both real and personal property tax. Certain Off-Airport Developments also contain some
governmental entities.
Data were reviewed and tabulated in spreadsheets. Information was then analyzed and
summarized by Principal Tax Type, Source Entity Category, i.e., car rental agencies, airlines,
restaurants and bars, etc., and Benefiting Jurisdiction.
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Indianapolis International Airport Tax Impact Study
Results of Study
Many businesses operate at IND delivering products and services to airlines and the flying
public. Businesses collect and pay taxes as prescribed by State of Indiana laws and regulations.
Individual taxes are also levied and distributed according to statutory direction.
Direct Economic Impact from Tax Revenues Generated
A review of 52 possible taxes impacting the IND Entities yielded the following 10 Principal Tax
Types and the respective 2011 tax revenues generated from the IND Entities.
2011 Tax Revenues by Principal Tax Type
Indiana Auto
Rental Excise Tax
$3,200,375
7.12%
Marion County
Supplemental Auto
Rental Excise Tax
$3,200,375
7.12%
Marion County Food
and Beverage Tax
$486,930
1.08%
County Income Tax
Withholding
$4,886,222
10.87%
Indiana Gasoline
Excise Tax
$337,883
Marion County
.75%
Innkeeper’s Tax
$248,622
.55%
County Motor
Vehicle Excise
Surtax
$15,000
.03%
Indiana Income
Tax Withholding
$12,731,272
28.34%
Indiana Sales/Use Tax
$8,525,460
18.97%
Personal Property Tax
$11,311,799
25.17%
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Indianapolis International Airport Tax Impact Study
Each of the Principal Tax Types is described in more detail below.
• Employers are required to withhold Indiana Income Tax at 3.4% from employees’ wages
after applicable deductions. The tax is applied to the adjusted gross income, as defined
under Indiana statutes, of all resident individuals and to the part of the adjusted gross
income derived from sources within Indiana of all nonresident individuals.
• Personal Property Taxes are imposed on certain types of personal property. Tangible
personal property subject to assessment includes the following: office equipment,
machinery and equipment, advertising devices, such as billboards located on real property
not owned by the owner of the devices, and airplanes not subject to the Aircraft Excise Tax.
Property tax payments are based on the net assessed value (AV) of property and tax rates.
Business Personal Property Tax returns are filed annually. Before 2002, assessed value was
equal to 33 1/3% of the true tax value of property. Currently assessed value equals 100%
of true tax value. The Department of Local Government Finance reviews and certifies
budgets, tax rates and levies of all Indiana political subdivisions.
• The Indiana Sales/Use Tax is imposed on all retail transactions made in Indiana. The
person acquiring property in Indiana is liable for the tax, but retail merchants are
responsible for collecting the tax. The Indiana Sales/Use Tax is imposed, at the time of sale,
on the amount of gross receipts received by the retail merchant.
• The County Option Income Tax is imposed on the Indiana adjusted gross income of
individual resident and nonresident county taxpayers of each county with the applicable
rate varying by county.
• Indiana Auto Rental Excise Tax is imposed on the rental of vehicles for periods of less than
30 days and weighing less than 11,000 pounds. The tax rate is 4% of rental charges.
• Since 1997, a 2% Marion County Supplemental Auto Rental Excise has been imposed on
the rental of certain passenger motor vehicles and trucks at a rate equal to 2% of the gross
retail income received by a retail merchant for the rental. Certain exclusions apply. The
Marion County Supplemental Auto Rental Excise Tax was increased in 2005 by an additional
2%. The tax rate imposed is 4%.
• Since 1981, a 1% Marion County Food and Beverage Tax has been imposed on the gross
retail income received by a retail merchant from any transaction within Marion County in
which food or beverage is furnished, prepared or served. However, it does not apply to
transactions exempt from Indiana Gross Retail Tax, as defined under Indiana statutes. The
Marion County Food and Beverage Tax was increased in 2005 by an additional 1%. The tax
rate imposed is 2%.
• Indiana Gasoline Excise Tax is added to the selling price of gasoline. It is imposed on
gasoline distributors, but is passed through to consumers. The current tax rate per gallon
is $0.18.
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Indianapolis International Airport Tax Impact Study
Indianapolis International Airport Tax Impact Study
• Since 1997, a 6% Marion County Innkeeper’s Tax has been levied on every person
engaged in the business of renting or furnishing, for periods of less than 30 days, any
lodgings in any hotel, motel, inn, tourist camp, tourist cabin or any other place in which
lodgings are regularly furnished for a consideration. This tax is applied in addition to
the Indiana Sales/Use Taxes imposed under these circumstances. The Marion County
Innkeeper’s Tax was increased in 2005 by an additional 3% and again in 2009 by an
additional 1%.
• The County Motor Vehicle Excise Surtax is imposed on vehicles with a gross weight less
than 11,000 pounds. Adopting counties may impose the Surtax at rates ranging between
2% and 10% or at a specific amount of at least $7.50 and not more than $25.00.
While the number of Principal Tax Types may seem small, the number of tax paying entities is
large. During 2011, tax revenues were levied, collected and paid by at least 130 IND Entities
according to statutes governing their activities and locations. It is important to note that these
130 IND Entities produce economic benefits for their owners, employees and surrounding
communities well beyond the impact of the tax revenues they generated. 2011 Principal Tax
Types paid by the latter are summarized in the table below by Source Entity Category. Graphical
presentations of the Principal Tax Types and number of IND Entities by Source Entity Category
also follow.
Source Entity
Category
Average Tax Dollar
per Source Entity
Category
Total 2011 Taxes
by Source
Number of
IND Entities
$13,186,633
9
29.34%
$1,465,181
Logistics
12,585,965
4
28.00%
3,146,491
Services
5,183,506
35
11.53%
148,100
Airlines
5,174,782
17
11.52%
304,399
Government
3,916,442
2
8.71%
1,958,221
Food/Beverage
2,412,166
21
5.37%
114,865
Retail
1,220,568
32
2.72%
38,143
Hotel
617,151
2
1.37%
308,576
Indianapolis
Airport Authority
516,881
1
1.15%
516,881
Contractors
129,844
7
0.29%
18,549
Car Rental
$44,943,938
130
Percentages
100.00%
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Indianapolis International Airport Tax Impact Study
2011 Tax Revenues by Source Entity Category
Hotel
$617,151
Food/Beverage
$2,412,166
Indianapolis
Airport Authority
$516,881
Retail
$1,220,568
Contractors
$129,844
Government
$3,916,442
Airlines $5,174,782
Car Rental
$13,186,633
Logistics $12,585,965
IND Entities by Source Entity Category
Number of
Entities
80
76
70
60
50
36
40
2
7
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Total IND Entities
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22
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/B
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30
IND Entities with
Reported Data
10
Indianapolis International Airport Tax Impact Study
As noted previously, this study identified seven Benefiting Jurisdictions that are the primary
recipients of the direct economic impacts that result from the tax revenues generated from
existing IND Entities. A breakdown of the aggregate dollar impact on each Benefiting
Jurisdiction of the Principal Tax Types included in this study follows.
2011 Tax Revenues by Benefiting Jurisdiction
Capital Improvement
Board
$3,935,927
Wayne Township
$845,318
Metropolitan School
District of Wayne Township
$241,223
Decatur Township
$4,660,400
Marion County
$6,434,461
State of Indiana
$21,594,616
Metropolitan School District
of Decatur Township
$7,231,993
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Indianapolis International Airport Tax Impact Study
IND-based tax revenues may represent a very small portion of some Benefiting Jurisdictions’
total tax revenues or a significant portion of others. For instance, note below the impact of
personal property taxes generated by IND Entities on the total property tax levies of applicable
Benefiting Jurisdictions.
Property Taxes by Benefiting Jurisdictions as a
Percentage of 2011 Property Tax Levy
2011/Pay 2012
Personal Property
Tax Revenues
Benefiting
Jurisdiction
2010/Pay 2011
Property Tax Levy
Percentages
$7,231,993
$22,851,961
31.65%
Decatur Township
2,132,944
5,749,007
37.10%
Marion County
1,656,351
862,776,181
0.19%
241,223
40,660,657
0.59%
49,289
19,806,309
0.25%
$11,311,800
$951,844,115
Metropolitan School District
of Decatur Township
Metropolitan School District
of Wayne Township
Wayne Township
As one might expect, Source Entity mix within a given Benefiting Jurisdiction largely determines
the types of taxes that will be generated, as well as the direct economic impact resulting
therefrom, as shown in the graphs that follow for each Benefiting Jurisdiction and in aggregate
for all Benefiting Jurisdictions.
State of Indiana - $21,594,616
$7,000,000
$337,883
$6,000,000
Income Taxes Sales/Use Taxes Excise Tax
$-
$544,065
Car Rental
Logistics
$3,341,380
$543,994
$1,000,000
$2,924,805
$2,000,000
$2,835,584
$3,000,000
$4,793,947
$4,000,000
$5,600,655
$5,000,000
$350,078
$322,225
Airlines
Government
Food/Beverage,
Retail & Hotel
Indianapolis
Airport Authority
Services &
Contractors
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Indianapolis International Airport Tax Impact Study
Metropolitan School District of Decatur Township - $7,231,993
$4,000,000
Property Taxes $3,500,000
$3,000,000
$2,000,000
$2,968,417
$3,862,533
$2,500,000
$1,500,000
$1,000,000
$310,279
$54,115
$500,000
$-
$36,649
Car Rental
Logistics
Airlines
Food/Beverage, Retail
& Hotel
Services & Contractors
Marion County - $6,434,461
$3,000,000
$861,212
$2,500,000
Income Taxes Property Taxes Excise Taxes
$2,000,000
$145,542
$15,000
$10,716
$-
Logistics
$59,265
$202,133
$202,159
Car Rental
$1,241,565
$500,000
$579,617
$1,000,000
$1,053,625
$1,781,296
$1,500,000
Airlines
Government
$162,600
$119,731
Food/Beverage,
Retail & Hotel
Indianapolis
Airport Authority
Services &
Contractors
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Indianapolis International Airport Tax Impact Study
Decatur Township - $4,660,400
$3,000,000
$2,500,000
Income Taxes Property Taxes Excise Taxes
$2,502,845
$2,000,000
$1,500,000
$500,000
$875,397
$1,139,076
$1,000,000
$5,444
$-
$1,045
Car Rental
$15,959
$9,204
Logistics
$11,010
$1,044
Airlines
$840
$91,500
$6,417
$619
Government
Food/Beverage,
Retail & Hotel
Indianapolis
Airport Authority
Services &
Contractors
Capital Improvement Board - $3,935,927
$3,500,000
$3,000,000
Excise Taxes
$2,000,000
$1,500,000
$3,200,375
$2,500,000
$1,000,000
$735,552
$500,000
$0
Car Rental
Food/Beverage, Retail & Hotel
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Indianapolis International Airport Tax Impact Study
Wayne Township - $845,318
$800,000
$700,000
$600,000
Income Taxes Property Taxes Excise Taxes
$400,000
$697,530
$500,000
$300,000
$-
$4,181
Car Rental
$855
$36,941
$25,675
$2,476
$36,835
Logistics
$3,363
$21,789
$100,000
$4,180
$11,493
$200,000
Airlines
Government
Food/Beverage,
Retail & Hotel
Indianapolis
Airport Authority
Services &
Contractors
Metropolitan School District of Wayne Township - $241,223
$120,000
Property Taxes $100,000
$114,051
$80,000
$90,369
$60,000
$20,000
$0
$36,698
$40,000
$105
Car Rental
Logistics
Food/Beverage, Retail & Hotel
Services & Contractors
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Indianapolis International Airport Tax Impact Study
In aggregate, one can see the significance of the tax revenue benefits produced for the
Benefiting Jurisdictions from the operations of car rental agencies, logistics companies and
airlines. Other businesses tend to not generate the same level of impact from a tax perspective.
All Benefiting Jurisdictions - $44,943,938
$14,000,000
Income Taxes Property Taxes Excise Taxes
Sales/Use Taxes
$5,964,683
$10,000,000
$6,753,633
$12,000,000
$8,000,000
$698,313
$6,000,000
$80,895
$-
$144,477
$751,450
Car Rental
Logistics
$4,615,037
$2,000,000
$2,924,805
$3,916,442
$4,423,431
$6,621,282
$4,000,000
$5,600,655
$735,552
$751,351
Airlines
Government
$445,051
Food/Beverage,
Retail & Hotel
Indianapolis
Airport
Authority
$516,881
Services &
Contractors
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Indianapolis International Airport Tax Impact Study
Real Property Tax Impact from Off-Airport Developments
This section examines one of the more significant economic benefits impacting the Benefiting
Jurisdictions. Certainly one may conclude that there are countless benefits to be derived from
the collateral developments that often spring up around an airport, particularly in terms of
jobs and local spending. These benefits often multiply in number and impact when an airport
maintains a large cargo operation.
IND is ranked the eighth largest cargo facility in the nation and 22nd in the world. Its ranking
is derived primarily from being home to a major FedEx special hub for global operations. This
and other factors combine to make IND an important contributor to central Indiana’s growing
economy, especially in the life sciences, technology and logistics sectors. Therefore, it may be
reasonable to conclude that much of the Off-Airport Developments are the result of a desire to
be in close proximity to an airport cargo operation of this nature and magnitude. It may also
be reasonable to conclude that, were it not for IND, some of the Benefiting Jurisdictions would
not have been able to create (or at least would have had difficulty creating) the number of job
opportunities that exist today within their locality, thus leading to fewer and lesser positive
economic impacts.
This study examines only one of these positive impacts: the impact on real property tax growth
in the adjoining communities to IND from the previously defined Off-Airport Developments.
While the incremental impact of such collateral development resulting from the existence of
IND is difficult to quantify, the nature of the businesses that have grown up around IND seems
to suggest that the airport is a significant driving force behind the establishment, growth and
sustainability of the Off-Airport Developments. A graph of the number of business parcels and
dollar amount of real property taxes generated within each Off-Airport Development is shown
below.
The Outer Ring Represents the
2011/Pay 2012 Real Estate Taxes
57
$5,836,291
Business
Parcels
$6,664,803
190
Ameriplex
Park Fletcher
17
Indianapolis International Airport Tax Impact Study
Of course, with the onset and evolution of these and other Off-Airport Developments, the real
property tax base (among other positive economic impacts) within certain Benefiting Jurisdictions
grows. The following tables provide a breakdown by Benefiting Jurisdiction of the real property
tax revenues derived from Off-Airport Developments in 2011.
Ameriplex Allocation of Property Taxes
Decatur Township
$1,139,879
Metropolitan School District of Decatur Township
Marion County
3,722,579
973,833
$5,836,291
Park Fletcher Allocation of Property Taxes
Wayne Township
$1,692,276
Metropolitan School District of Wayne Township
3,450,203
Marion County
1,522,324
$6,664,803
The impact of real property taxes generated from Off-Airport Developments in Marion County is
further apparent when presented as a percentage of each Benefiting Jurisdictions’ total property
tax levy, as shown below.
2011 Pay/2012
Total Property Tax
Revenues
Tax Levy 2010
Pay/2011
Appropriations
Percentage
$1,139,879
$5,749,007
19.83%
Metropolitan School District
of Decatur Township
3,722,578
22,851,961
16.29%
Wayne Township
1,692,276
19,806,309
8.54%
Metropolitan School District
of Wayne Township
3,450,203
40,660,657
8.49%
Marion County
2,496,158
862,776,181
.29%
Benefiting Jurisdiction
Decatur Township
18
Observations and Conclusions
Based on the analysis of the data gathered in connection with this study, a number of
observations and conclusions can be drawn:
• As reported in other studies, IND and other airports provide substantial economic benefit in
a variety of forms. More specifically, this study demonstrates that IND and the companies
and businesses located at IND annually provide more than $44 million in direct
economic benefits in the form of state and local tax revenues to the State of Indiana
and six local tax jurisdictions. This amount includes tax revenues that had readily available
measures or that could be reasonably estimated.
• Car rental operations and logistic companies (primarily FedEx) provide the largest direct
economic impacts to the Benefiting Jurisdictions from tax revenues. Aside from income
taxes, these businesses generate a substantial portion of all the Principal Tax Types
identified in this study.
• With the exception of the State of Indiana and Marion County, the Benefiting Jurisdictions
receive direct economic impacts primarily from the personal property taxes and various
excise taxes that are generated from the operations of the IND Entities, most notably,
car rental agencies, logistics companies (primarily FedEx) and airlines. Other types of
businesses produce far less impact on these same Benefiting Jurisdictions from a tax
perspective.
• The existence of IND has spurred incremental Off-Airport Developments that have provided
economic impact to certain Benefiting Jurisdictions, including the generation of more
than $12.5 million in real property tax revenues. While other surrounding Off-Airport
Developments, such as the Plainfield (Indiana) Business Park, are not included in the scope
of this study, it is appropriate to acknowledge that such developments are likely providing
similar benefits to their local communities.
• The amount of tax revenues generated within neighboring jurisdictions varies dramatically,
both in amount and type. Tax revenues are generally “earned” according to the location
of the transaction, the location where services are performed or the location of property.
Therefore, the resulting tax benefit to a given Benefiting Jurisdiction is the result of
combined effects of the size, nature and applicable tax laws, and is not based on the
determination, participation or actions of IND or any of the IND Entities, except to the
extent such entities choose to operate within a particular Benefiting Jurisdiction.
• The overall tax impact of IND is substantial. While it is difficult to assess what the tax
impact on Benefiting Jurisdictions would be without the existence of IND, it may be fair to
assume that few of the logistics, car rental and airline companies would reside within these
Benefiting Jurisdictions. IND is the nation’s eighth largest cargo facility. Approximately
50,000 packages are sorted daily, annually equating to about 18 million packages. The
logistics industry located within IND’s footprint accounts for more than $12 million in
tax revenues, some or all of which would be lost without IND. Additionally, without a
substantial concentration of car rental agencies, the resulting taxes produced from such
businesses would be considerably less, if nonexistent, than the more than $13 million they
generated in 2011. Finally, the more than $5 million in tax revenues generated from the
airlines would likely be zero if IND did not exist.
2012
19
appendix
20
ameriplex property map
park fletcher property map
Indianapolis International Airport Tax Impact Study